Will Fan, CEO at NewCampus, a modern business school for emerging markets at the intersection of education, community and new technology.
Last month, Duolingo’s stock price dropped sharply after Apple announced its latest AirPods with real-time conversation translation. The market interpreted Apple’s move as a direct competitive threat. Despite Duolingo’s strong brand, loyal user base and proven gamification model, its valuation experienced immediate volatility. It didn’t matter that the company had been building in the language-learning space for over a decade. In that moment, perception outweighed fundamentals.
This dynamic isn’t unique to Duolingo. Over the past decade, companies large and small have seen their valuations rise and fall dramatically in response to headlines they did not control. Zoom’s stock surged during the pandemic as remote work became a necessity, then declined as hybrid work took hold. Peloton’s meteoric growth reversed when gyms reopened and consumer demand normalized. Even Meta, Google and Tesla have had billions wiped off their market caps overnight due to earnings misses, public backlash or aggressive competitor product launches.
For founders, these stories may feel distant, especially if you’re still in early stages or working in private markets. Yet the lesson is universal: public sentiment matters. Whether you’re raising a seed round, preparing for an IPO or managing your investor base, the perception of your company can shape partnerships, hiring pipelines and even team morale. The best founders understand not only how to manage these shifts but how to use them to their advantage.
Perception Moves Faster Than Reality
The first principle to grasp is that markets often react more to narratives than to numbers. Your revenue might be steadily climbing, your churn rates improving and your product maturing. But if the dominant story in the market is that you’re being disrupted, perception can quickly become reality. This is exactly what happened to Duolingo. Apple did not launch a direct competitor—it released a translation feature. But the narrative that Duolingo was “at risk” was enough to rattle investor confidence and trigger a sell-off.
This is true across industries. For any startup, the arrival of a larger, better-funded or flashier competitor can suddenly shift the story. And if you don’t actively shape your own narrative, someone else—whether it’s the press, your competitors or your critics—will do it for you. As a founder, your job is not just to build great products and grow revenue. It’s also to manage how your business is perceived. This involves refining your message, articulating your unique value proposition and staying close to your stakeholders: customers, employees and investors alike.
Moments Of Chaos Are Opportunities To Clarify
Periods of market volatility or competitive pressure don’t have to be purely defensive moments. They can also be opportunities to clarify your strategy. If a competitor launches a major product, use that moment to double down on what makes you different. Highlight your strengths publicly. Publish content that reinforces your approach. Remind customers why they chose you. High-pressure moments are not just challenges—they’re also stages from which you can tell your story more powerfully.
A useful example is Meta’s pivot to the metaverse. The company’s announcement was met with skepticism and heavy criticism, with investors unsure of the new direction. Yet instead of abandoning the vision, Meta used the moment to refine its long-term roadmap and communicate more consistently about its strategy. Over time, that clarity began to rebuild investor confidence. Founders can take a similar approach. When the market shifts or narratives turn, engage your community, answer the hard questions and sharpen your messaging. The worst move is to go silent. The second worst is to panic and pivot away from your mission without a plan.
Reading The Market And Riding The Wave
Market sentiment is a powerful force. Founders can either let it knock them off balance or learn to use it to build momentum. Becoming a student of timing is essential. This means knowing when it’s smart to raise capital, when to announce a new product, when to rebrand and when to simply stay quiet and execute. Too many startups either try to force their way into crowded news cycles or announce major changes during periods of uncertainty, diluting their impact. Reading the market helps you avoid these missteps.
The opposite is also true: when your category is hot—when your competitor just raised a big round, when customers are excited, when the press is paying attention—lean in. Use the energy to your advantage. Launch case studies, announce key hires or close strategic partnerships and communicate them widely. Even if a major competitor enters your space, it’s often a sign that the market you’ve been building in is valuable. This is your chance to remind the world how you’re different.
Founders don’t need to react to every signal from X, Reddit or the VC community. But they do need to know which signals matter and build their strategy accordingly. The goal is to shift from reactive to proactive, using market sentiment as a tool, not a threat.
Moving Forward: Building Narrative Resilience
These headline-driven moments will happen. Sometimes they will be justified. Other times they will come out of nowhere. Either way, they present an opportunity—if you’re ready. Founders who handle them best play the long game. They understand that the goal is to build trust over time, not to win every news cycle. They stay close to customers. They communicate openly and consistently. They build in public and keep their teams focused on execution rather than hype.
Google’s Gemini rollout offers a recent case in point. The initial release was rocky, drawing public criticism and skepticism. But rather than abandoning the effort, Google went back to the drawing board, addressed the issues and continued to ship improvements. Over time, the product matured and trust was rebuilt. This is the kind of resilience founders need to emulate.
So the next time your company is rocked by a headline—whether it’s a new competitor, a downturn or a viral tweet—don’t panic. Step back. Reassess. Communicate your value more clearly and with greater conviction.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
